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February 13, 2024 | Last updated July 1, 2025

By Morningstar Manager Research

Blog

5 min read

US Fund Flows: May Inflows Surge as Investors Rewire Strategies

After April’s rare retreat, May saw a $56 billion surge into US funds led by fixed income and a crypto-fueled boom in alternatives, even as US equities bled assets.

Key Takeaways

  • Following a rare month of outflows from long-term US mutual funds and exchange-traded funds, investors came back in May as equity markets rallied, resulting in $56 billion of inflows.

  • US equity funds endured outflows of about $17 billion, with outflows across almost every US equity category, while international equity funds brought in nearly $7 billion.

  • Alternative assets raked in $7.1 billion in May, part of a $46.2-billion haul over the past year, dominated by digital assets.

US Fund Flows Rebound as Markets Rally

Coming off a volatile month as a result of US President Donald Trump's announcement of widespread tariffs, global markets rallied in May. Investors responded by putting over $56 billion in US open-end funds and ETFs. Due to the continued uncertainty in global economies, inflows were largely concentrated in fixed income, which brought in over $60 billion across taxable- and municipal-bond category groups, while equity funds saw mixed interest. Exchange-traded and passively managed funds were the vehicles of choice for investors in May.

The charts below illustrate which direction the money is flowing for a variety of fund types. For a more complete analysis, download the full monthly report from Morningstar’s Adam Sabban and Ryan Jackson. 

This data was sourced from Morningstar Direct. Not a user? Get a free trial of Direct. 

Source: Morningstar Direct Asset Flows. Data as of May 31, 2025.

How Morningstar Analysts Assess Fund Flows

Investors Pivot From US to International Equities

US equity funds saw significant outflows in May 2025, shedding over $17 billion in assets, their largest monthly withdrawal over the last 12 months. In contrast, international-equity funds attracted more than $7 billion, marking their strongest monthly inflow in 2025. This shift may be a response to the uncertainty surrounding Liberation Day and investors’ preference for broader global diversification.

Source: Morningstar Direct Asset Flows. Data as of May 31, 2025. OGR = Organic Growth Rate

Alternatives Growing Quickly, Dominated by Crypto

Alternative assets raked in $7.1 billion in May, part of a $46.2-billion haul over the past year. Digital assets, led by the $70-billion iShares Bitcoin Trust ETF, dominate this space, accounting for 85% of the category’s inflows over the past 12 months. That said, crypto’s dizzying one-year organic growth rate of over 50% has been slightly bettered by that of the equity market-neutral category, although that category is growing on a much smaller base, with about one-tenth of digital assets’ $95 billion.

Source: Morningstar Direct Asset Flows. Data as of May 31, 2025.

Strong Flows Into Commodities Funds Reverse in May

Following three straight months of strong inflows, commodities funds experienced a slight outflow in May. The two largest gold funds, SPDR Gold Shares and iShares Gold Trust, have been responsible for the majority of the category’s inflows through the first four months of the year as the price of gold surged; however, they shed a combined $1.8 billion in May. Energy funds also saw modest outflows for the month.

Source: Morningstar Direct Asset Flows. Data as of May 31, 2025.

More on Fund Flows from Morningstar

For more comprehensive analysis and commentary on US Fund Flows, download this month’s full report.

Additional topics include: 

  • Active/passive flows by US category group 

  • Flows for the largest fund families 

  • Government bond fund and money market flows  

Can’t get enough fund flows data? Check out Morningstar’s Ultimate Guide to Fund Flows. 

Unsure about the future of active management? Check out this insightful article from a Morningstar analyst.

This article is adapted from the Morningstar U.S. Fund Flows report for May 2025. Download the full report here. 

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Download the Free Monthly Fund Flows Report

Note: The figures in this report were compiled on Feb. 28, 2025, and reflect only the funds that had reported net assets by that date. The figures in both the commentary and the extended tables are survivorship-bias-free. This report includes both mutual funds and exchange-traded funds but not funds of funds unless specifically stated. It does not include collective investment trusts or separate accounts. Important methodology note: Morningstar computes flows using the standard approach in the industry: Net flow is the estimated change in assets not explained by the performance of the fund. Our method assumes that flows occur uniformly over the course of the month. Adjustments for mergers are performed automatically. When liquidated funds are included, the fund's final assets are counted as outflows. Reinvested dividends are not counted as inflows. We use fund-level reinvestment rates to improve accuracy in this respect. We make ad hoc adjustments for unusual corporate actions such as reverse share splits, and we overwrite our estimates with actual flows if managers are willing to provide the data to us. When possible, Morningstar offsets outflows caused by transfers to other investment vehicles that share an identical mandate since they are not indicative of a change in investor interest.